Question 1

With choice S1, a manager sees gains of $10 million and $6 million. With choice S2, a manager sees gains of $12 million and $8 million. S2 might be the choice of a pessimistic manager.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following characterizes a highly leveraged company?

Accepted Answer

A)  high total assets relative to total debt 
B)  high total debt relative to total assets 
C)  high total debt relative to inventories 
D)  high total interest payments relative to total debt

Question 3

The decision tree shows the profit outcomes for a toy store in a strong and a weak economy for next year. What is the expected value of profit for the store for the year?

Accepted Answer

A)  $10,500 
B)  $20,900 
C)  $29,000 
D)  $10,400

Question 4

Which psychological orientation would be typical of a manager who is pessimistic about her business environment?

Accepted Answer

A)  a maximin orientation 
B)  a minimin orientation 
C)  a maximax orientation 
D)  a minimax orientation

Question 5

This regret matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company. A minimax Bigg manager would choose S2 because it has the smallest maximum regret of 1.

Accepted Answer

A) True 
 B)False

Question 6

A queuing theory analysis for the Department of Motor Vehicles determines that customers typically wait for 8 minutes and that the agency should strive never to exceed more than 5 customers in a single line. What is the maximum amount of time that customers should be expected to wait?

Accepted Answer

A)  8 minutes 
B)  40 minutes 
C)  20 minutes 
D)  24 minutes

Question 7

Mia, a manager at Best Buy, increases the order size for a product that the company sells, which will ________.

Accepted Answer

A)  increase both ordering costs carrying costs 
B)  increase ordering costs and decrease carrying costs 
C)  decrease both ordering costs carrying costs 
D)  decrease ordering costs and increase carrying costs

Question 8

In a short essay, explain how managers can use current value for making organizational decisions.

Accepted Answer

The answer of In a short essay, explain how managers...

Question 9

Decision trees show the profit outcomes for the plans for two doughnut stores in two different locations in a strong and a weak economy for the future. If the investor interested in building a store is pessimistic, in which location should she build?

Accepted Answer

A)  She should build Store 2, because it has a greater minimum profit. 
B)  She should build Store 2, because it has a greater maximum profit. 
C)  She should build Store 1, because it has a greater maximum profit. 
D)  She should build Store 1, because it has a greater minimum profit.

Question 10

Production data for the number of hours required per unit for making the Droid and iPhone versions of cell phone components by Bizzer, a high-tech manufacturing firm, is given below. Suppose the plant decides to make the maximum number of iPhone components possible and reach the rest of its capacity by making Droid phones. How much profit will it make? Monthly Product

Accepted Answer

A)  $3750 
B)  $1500 
C)  $5250 
D)  $4000

Question 11

Which role does uncertainty typically play in how managers function?

Accepted Answer

A)  Uncertainty limits the amount of information that is available. 
B)  Uncertainty increases the amount of information that is available. 
C)  Uncertainty improves the quality of information that is available. 
D)  Uncertainty enhances the information that is available.

Question 12

Decision trees are unreliable for making pricing decisions.

Accepted Answer

A) True 
 B)False

Question 13

This payoff matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company. From Bigg's point of view, the S2 maximum regret is 9.

Accepted Answer

A) True 
 B)False

Question 14

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza. What is the maximum regret value for S4?

Accepted Answer

A)  13 
B)  7 
C)  2 
D)  17

Question 15

This regret matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company. A minimax Bigg manager choosing S3 would have a greatest possible regret of 2.

Accepted Answer

A) True 
 B)False

Question 16

Mia, a manager at Best Buy, should be able to find Q, the most economic order size for a product, by ________.

Accepted Answer

A)  locating where the carrying costs curve and the total costs curve intersect 
B)  locating where the carrying costs curve and the ordering costs curve intersect 
C)  locating where the carrying costs curve and the ordering costs curve are parallel 
D)  locating where the total costs curve and the ordering costs curve are parallel

Question 17

In the economic order quantity (EOQ) model, increasing the order size will decrease ordering costs.

Accepted Answer

A) True 
 B)False

Question 18

In a short essay, explain how carrying costs and ordering costs change with order size in EOQ (economic order quantity) analysis.

Accepted Answer

The answer of In a short essay, explain how carrying...

Question 19

In a short essay, explain the type of strategy that a pessimistic manager would take for his company.

Accepted Answer

The answer of In a short essay, explain the type...

Exam 6: A Quantitative Module

With choice S1, a manager sees gains of $10 million and $6 million. With choice S2, a manager sees gains of $12 million and $8 million. S2 might be the choice of a pessimistic manager.

Which of the following characterizes a highly leveraged company?

The decision tree shows the profit outcomes for a toy store in a strong and a weak economy for next year. What is the expected value of profit for the store for the year?

Which psychological orientation would be typical of a manager who is pessimistic about her business environment?

This regret matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company. A minimax Bigg manager would choose S2 because it has the smallest maximum regret of 1.

A queuing theory analysis for the Department of Motor Vehicles determines that customers typically wait for 8 minutes and that the agency should strive never to exceed more than 5 customers in a single line. What is the maximum amount of time that customers should be expected to wait?

Mia, a manager at Best Buy, increases the order size for a product that the company sells, which will ________.

In a short essay, explain how managers can use current value for making organizational decisions.

Decision trees show the profit outcomes for the plans for two doughnut stores in two different locations in a strong and a weak economy for the future. If the investor interested in building a store is pessimistic, in which location should she build?

Which role does uncertainty typically play in how managers function?

Decision trees are unreliable for making pricing decisions.

This payoff matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company. From Bigg's point of view, the S2 maximum regret is 9.

This payoff matrix gives potential dollar gain values in thousands for strategies S1, S2, S3, and S4 for Sam's Pizza and competitive strategies CA1, CA2, and CA3 for Pam's Pizza. What is the maximum regret value for S4?

This regret matrix gives values for strategies S1, S2, and S3 for the Bigg Company and competitive strategies CA1, CA2, and CA3 for the Large Company. A minimax Bigg manager choosing S3 would have a greatest possible regret of 2.

Mia, a manager at Best Buy, should be able to find Q, the most economic order size for a product, by ________.

In the economic order quantity (EOQ) model, increasing the order size will decrease ordering costs.

In a short essay, explain how carrying costs and ordering costs change with order size in EOQ (economic order quantity) analysis.

In a short essay, explain the type of strategy that a pessimistic manager would take for his company.